Tuesday stock market forecast

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Tuesday uncertain.
• ES pivot 2322.83  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias higher.
• YM futures trader: no trade tonight.

Recap

I always get nervous whenever we climb into record territory, wondering when we're going to run out of buyers.  Apparently though, that point is not just yet as our call for a higher close Monday paid off with another triple digit advance in the Dow, up 143 as it continues to climb its upper BB to give us a three white soldiers pattern.  This obviously can't continue forever - but can it continue one more day?  We cast our steely gaze upon the charts as our time grows short and op-ex week rolls on to figure out whither Tuesday.

The technicals

VIX, daily

The VIX:  Last night I said the VIX looked likely to move higher but hedged on when, claiming only "sometime this week", mostly because I wasn't sure it would be Monday.  Turns out it was s we got one of those unusual days when the VIX rises along with the rest of the market, up  two percent.  But it did it on a strange gap-up red marubozu making one wonder if the VIX really packs the gear required for any further gains on Tuesday.  This one is now questionable.  Just look at this strange chart and that fat red candle hanging in space up there.

Market index futures: Tonight, all three futures are lower at 12:20 AM EST with ES down 0.10%. 

ES daily pivot: Tonight the ES daily pivot rises again from 2310.50 to 2322.83. And even with that gain ES remains above its new pivot, though only by a bit now.  Nevertheless, this indicator continues bullish - for the moment.



Accuracy: 

Month    right  wrong  no call  conditional  batting   Dow
                                             average  points

January   10      2       7           1       0.846    595
February   4      0       5           0       1.000    519


     And the winner is...

The Dow has enjoyed quite a nice three day run, one that's taking on an exponential quality  It's also getting pretty overbought at this point.  We also note that the trans hit their upper BB on Monday, as well as month-long resistance.  And the VIX turned around too on Monday, albeit in an odd sort of way.  Also tonight the futures are running lower for the first time in several days.

The question is, are these factors enough to snap our current winning streak?  Unfortunately, other than futures being down a bit, there's no really overt bearish candles to be found, at least not enough to make a negative call.  So while I never like doing it, I'm going to have to wimp out and simply call Tuesday uncertain.

YM Futures Trader

No trade tonight.